Computer Crime Case B: Auction Fraud
The investigation began with police receiving several complaints made to the National White Collar Crime Center by persons alleging they had been scammed out of small amounts of money on online auction sites. Ultimately, the police learned that there were more than 100 similar complaints and losses into the six figures altogether. One woman was the mastermind behind the entire scam.
Here is how the scam worked. The suspect would go to the store and take a UPC label off a product that was a much cheaper version of what she had advertised on E-Bay (and what the purchaser thought they were buying). Next, she would put clear tape on the label, return to the store, and attach it to a much more expensive version of the same type of product. When she went to buy this item it would ring up for the price of the cheaper version. The suspect would then sell the item online as the more expensive item she had actually fraudulently stolen from the store. Eventually the suspect was caught in the act, and she turned to a new scam. Instead of changing the UPC labels at the stores, she would simply post items for auction, collect the money, and never ship the item to the winner.
Ultimately, PayPal was alerted that these individuals were not receiving their purchased items and asked the suspect to send them the tracking number to prove the items were actually shipped. The suspect then took free magazine subscriptions, and typed fake letterhead for a publication center out of a different state to make it look like junk mail. The suspect would send it with a certified mail sticker and provide PayPal with that tracking number. Most people dismissed the magazine and junk mail and threw it away but enough individuals noticed the post mark was from the same city and state as the person who was supposed to be shipping them an item from their online bid.
The suspect was charged and prosecuted. In the state court this individual would have spent maybe a year in prison. However, because there were victims all over the country, she was prosecuted in federal court. In federal court she received three and a half years in prison. It took investigators months to collect all of the evidence in this case. Computer forensic evidence, including transaction logs and files from the suspect’s computer, sealed the conviction.